Should you use ewallets to buy gold?
MUMBAI: If you have a Paytm e-wallet, you can buy and sell gold in digital and physical forms. Though there is a monthly transaction limit of ₹20,000 and a daily transaction limit of ₹5,000 for using the e-wallet, you can buy gold of any amount using other payment modes on the same platform. You can use payment modes like net banking, credit or debit card on the same platform and don’t have to load the wallet to buy gold. To enable this service, Paytm has partnered with MMTCPAMP India Pvt. Ltd—a joint venture between MMTC Ltd and PAMP Switzerland.
WHAT’S ON OFFER
The minimum unit you can buy is 0.1 gram, which currently costs around ₹2,880, according to MCX data. To make the purchase, among other details, you also need to enter your PIN code. “The idea is to ensure that customers buy gold only if we can deliver the accumulated gold at their location, should the customer choose to convert the digital gold into physical form. However, over time, when we roll out more features to use the accumulated gold, this restriction would be lifted,” said Krishna Hegde, senior vice-president, Paytm.
If the value of the cumulative transaction crosses ₹50,000, you will need to go through a full KYC process. If a single transaction value crosses ₹2 lakh, you will need to submit your PAN details. The gold will be held in MMTC-PAMP’s vault, the custodian of the gold, right from the point you buy it. Paytm is only a platform for purchase. You will not earn any interest on your investment. If you leave the account inactive for 5 years, the gold held in your account will be liquidated. You can claim the amount by reaching out to MMTC-PAMP and providing relevant identity proofs and account details.
WHAT IT COSTS
There are no charges while buying. However, if you have to sell gold in digital form or redeem gold in physical form, you have to pay a fee.
If you redeem gold in physical form—bars or coins—you will have to pay making and delivery charges. According to Paytm’s website, charges for 1 gram of physical gold is ₹351, for 2 gram it is ₹377 and ₹629 for 10 gram. Delivery of physical gold happens within 14 working days. You can also sell the gold. To sell in digital form, you need to provide your bank account number and IFSC code, and pay a convenience fee. When you sell, remember there will be a price difference because sell is a buyback offer by MMTC PAMP. For instance, on May 16, the buy price was ₹2,922 per gram while sell price was ₹2,789. “The buy and sell prices of gold vary as per the real-time global marketlinked price,” said Hegde.
WHAT YOU SHOULD DO
If you are considering gold for investment, evaluate your financial portfolio. There are multiple ways to invest in gold such as gold exchange traded funds (ETFs), sovereign gold bonds, physical gold and e-gold. Gold ETFs can cost an average of 0.9-1% a year. In case of sovereign gold bonds, you earn an interest along with capital appreciation, if any. While buying physical gold, you will have to shell out money in the form of making charges and also evaluate the purity. Hence, for investment purposes, you should consider sovereign gold bonds.